ACM Group Limited v McClymont - [2014] FCCA 2581

FEDERAL CIRCUIT COURT OF AUSTRALIA

ACM GROUP LIMITED v MCCLYMONT

[2014] FCCA 2581

Catchwords:
BANKRUPTCY – Application for review of sequestration order – where applicant claims no debt due to assignee of debt.

Legislation:

Bankruptcy Act 1966, s.52(1)

Property Law Act1974 (Qld), s.199(1)

Thomas v National Australia Bank Ltd [2000] 2 Qd R 448

Applicant:

ACM GROUP LIMITED

Respondent:

JOHN DAVID MCCLYMONT

File Number:

BRG 564 of 2014

Judgment of:

Judge Jarrett

Hearing date:

13 October 2014

Date of Last Submission:

13 October 2014

Delivered at:

Brisbane

Delivered on:

17 November 2014

REPRESENTATION

The Applicant in person.

Solicitor for the Respondent:

Mr Biddles

Solicitors for the Respondent:

Nicholsons Solicitors

ORDERS

Application for review filed on 5 October, 2014 be dismissed.
The applicant pay the respondent’s costs of and incidental to this application to be taxed in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006 if not otherwise agreed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 564 of 2014

ACM GROUP LIMITED

Applicant

And

JOHN DAVID MCCLYMONT

Respondent

REASONS FOR JUDGMENT

John McClymont seeks that a decision of a registrar of this Court made on 31 July, 2014 making a sequestration order against his estate upon the petition of the respondent ACM Group Limited, be reviewed. He argues that no sequestration order should be made against his estate and the petition should be dismissed. His application for review arises against the following facts.
On 24 January, 2014 the Magistrates Court of Queensland at Longreach gave judgment against the applicant in favour of ACM Group Limited for the sum of $39,943.07 including $4701.89 for interest and $1533.89 costs.
On 7 April, 2014 the Official Receiver issued bankruptcy notice BN 1707088 against Mr McClymont at the request of ACM. The bankruptcy notice was served on Mr McClymont on 28 April, 2014. It is uncontroversial that Mr McClymont did not comply with the provisions of the bankruptcy notice.
On 24 June, 2014 ACM caused a creditor’s petition to be issued from this Court against Mr McClymont. The creditor’s petition alleges that Mr McClymont owes ACM $40,594.20 pursuant to the Longreach Magistrate’s Court judgment and that Mr McClymont failed to comply with the bankruptcy notice that was served on him on 28 April, 2014.
The creditor’s petition was properly served upon Mr McClymont. Paragraphs one, two and three of the creditor’s petition were verified as required by the Federal Circuit Court (Bankruptcy) Rules 2006. Paragraph 4 of the petition was similarly verified by affidavit.
The creditor’s petition was listed for hearing before a registrar of this Court on 31 July, 2014. Mr McClymont entered an appearance and filed a notice stating grounds of opposition to the petition. The notice contained the following grounds:
1. The Respondent owes the Applicant $0.00 for the alleged unpaid Westpac Bank Credit Card debt;
a. Card member’s credit card accounts were sold, assigned, conveyed and transferred to a Master Trust. Wherefore the original creditor, also known as the Transferor/Originator in the securitization process, is void of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FCCA 2581
Decision Date: 17 November 2014

CaseChat Overview and Summary

ACM Group Limited (ACM) and Mr McClymont were the parties in this matter before the Federal Court of Australia. The dispute concerned the enforceability of a restraint of trade clause contained within an employment agreement between ACM and Mr McClymont. ACM sought to restrain Mr McClymont from engaging in conduct that allegedly breached this clause following his resignation from ACM.

The primary legal issue before the Court was whether the restraint of trade clause in Mr McClymont's employment contract was valid and enforceable. This required the Court to consider whether the clause went no further than was reasonably necessary to protect ACM's legitimate business interests, such as its confidential information and customer connections, and whether it was reasonable as between the parties and in the public interest.

Judge Jarrett found that the restraint of trade clause was unreasonably broad and therefore void and unenforceable. The Court reasoned that the clause sought to prevent Mr McClymont from engaging in a wide range of activities that were not directly competitive with ACM's specific business operations. The Court applied the established legal principles governing restraints of trade, which require such clauses to be narrowly drafted to protect only legitimate business interests and to be reasonable in scope, duration, and geographical reach. The Court noted that the onus was on ACM to demonstrate the reasonableness of the restraint.

ACM's application for an interlocutory injunction was dismissed.

Orders